Not necessarily. The housing market is very complex, and there is such a thing as induced demand - for example building lots more apartments in SF would make it even more attractive for e.g. tech companies to locate, and so they would quickly be filled, without moving the price.
Induced demand is just unsatisfied demand from parties not counted - if there are more people/companies that want to relocate to SF but can't because of a lack of available supply, that's just as much a shortage as for people and companies which wish to remain in SF.
It's not so simple. Some cities have too much housing. So much so the value of land goes down because of the house built on it.
Sure building more housing, pushing prices down might induce more demand, but there are a dozen other factors (not in the control of the city) that also influence demand - job vacancies, crime levels, quality of schools, etc, etc.
Induced demand refers to highways. Do you know of any studies demonstrating induced demand for housing?
As a counterpoint, look at all the empty cities China built in the middle of nowhere. According to the "induced demand" hypothesis, people should have materialized to occupy them, but that didn't happen.
Cities currently prevent the market from meeting even the regular demand, let alone any induced demand. Housing isn't going to get cheaper by not building housing.
Aren’t those empty houses in China prone to break down? I think I remember seeing a video of a guy visiting one of those buildings and managed to kick through the wall and floor pretty easily.
In Vienna they have this interesting thing where any apartment built before the 50s is rent-capped, so investors usually won't go for the very picturesque old-town properties.
This combined with 1/4th of apartments in the city being social housing really created a very affordable market for renters.
>really created a very affordable market for renters.
I wouldn't say it's very affordable in the post pandemic, post Ukraine world. It's affordable only if you get public social housing, or if you compare the private market rents to what's happening in the likes of London, Amsterdam, Berlin or Munich, but those are high paying banking/corporate/tech hubs, while Vienna is not, and so the lower rents also reflect the lower spending power of Viennese workers.
Most people can live in a rent-capped MRG apartment for two years and then immediately qualify for social housing and stay there until the day they drop dead - seems like a very affordable system to me, nonetheless.
The salaries are comparably horrible and that probably plays its part too in the equation, for sure, but on the other hand the salaries would also have to be higher if the state government didn't do such an excellent job at housing people for reasonable cost.
First question: How do you get in that system? Or is it reserved only for locals?
Because I contemplated moving to Vienna last year (most livable city, lowest rents and all that advertising) and I saw on Willhaben single bedroom apartments in decent shape were 1000+ Euros while software developer take home wages and perks weren't higher than in shitholes like Bucharest, Belgrade or Sofia (no offence, I'm also from around that region), sometimes even worse than there.
Second question: if the government is basically indirectly subsidizing employers by subsidizing housing for employees, meaning companies need to pay less for talent than in higher CoL areas, why then aren't more international tech companies opening offices in Vienna and instead keep hiring only in places with a housing shortage like London Berlin and Amsterdam? Something just doesn't add up. You'd think Vienna would be a magnet for companies instead of the overpriced cities with zero housing.
> How do you get in that system? Or is it reserved only for locals?
Any EU resident that has lived anywhere in Vienna for two years "gets in". After that, you either have to be under 30 or be below a certain income threshold at the time of getting the apartment. After you moved in you can earn however much you like - it doesn't matter. Some highly-ranked politicians still live in social housing because of this.
I've lived in a private single-bedroom apartment for ~300€ a month in Penzing (14th district) for a short while - there's plenty of older style apartments from before 1950 that are rent-capped through the MRG, so the owners can't charge too much for them. Vienna is big - not everywhere is the 1st district.
> Why then aren't more international tech companies opening offices in Vienna
Many international "old-school" tech companies like IBM are in fact heavily building work force in Vienna again due to the low labor cost (and point this out incessantly in DACH meetings - often to the displeasure of Austrians hearing how 'cheap' they are.) The issue is that for service-based work, most companies still near-shore to Romania, Czechia, Slovakia etc. since staff costs and taxes are considerably lower and you are spared the traditional regular strong union negotiations. Adding to this that Vienna is just culturally not a very techy or innovative place, never has been. And you can see and feel that with the (lack of) innovation happening. Many of my friends left to study in Graz, Munich or Zurich out right - they were usually the best of the best. Good tech talent here moves to Germany, Switzerland or even further westwards eventually for the salary.
But - on the other hand - Vienna is trying to build a start-up ecosystem with things like Brutkasten and success stories like Bitpanda and their start-up space in the Viertel Zwei area (2nd district).
Don't get me wrong, I love my city, but for various cultural reasons the move fast and break things tech mantra isn't something that leads to success here.
It’s crazy how these cities will try literally anything except building more housing.